Financing a business acquisition is difficult in today’s market. O’Keeffe & O’Malley assists buyers with their financing needs to help them minimize their risks and find the best terms. Whether you’re looking for traditional bank financing, SBA, venture capital, mezzanine or even an equity partner, rest assured we are very familiar with lenders and investors in the Kansas City area as well as throughout the U.S.
Oftentimes, in order to fund an acquisition, a buyer will need to have a minimum of 20-35% of the acquisition price in cash. If the buyer doesn’t have sufficient cash, then he or she will need to obtain equity from other sources.
We can help with that as well. We’re well connected with many sources, including private equity groups that like to partner up with good buyers/managers to acquire a company. These equity groups, located inside Kansas City and beyond, have plenty of capital that they want to put to work, so they are often willing to contribute the 20-35% down payment needed for a purchase. Plus, they have the sources to bring in other financing institutions to complete the transaction. The minimum earnings amount required of the target company by the private equity groups is normally $1 million.
Keep in mind that some acquisitions fail because the buyer is undercapitalized when making the purchase. Most buyers try to leverage all they can and buy as large of a business as possible. The bank will then normally tie up the business and personal assets, which leaves a buyer with no additional collateral to borrow additional funds. When a business goes through a slow cycle, or if receivables come in slower than expected, the business can get into a cash crunch. So, be sure to go into an acquisition with plenty of proceeds or cash to fall back on.
O’Keeffe & O’Malley can assist you with the debt or equity funding of your business purchase, whether you are looking for $1 million or $10 million